Trade of the Day: Applied Materials, Inc. (AMAT)

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Today, we are opening a new bullish trade on Applied Materials, Inc. (NASDAQ:AMAT). As traders look around for buying opportunities on Wall Street, one area they continue to land on is technology — especially semiconductors — as companies are pouring a lot of their tax savings into technology upgrades. The stocks in this industry have been soaring higher for the past few weeks, and AMAT just set a new all-time closing high of $59.99 on Tuesday.

The stock had an intra-day high that was higher than that price when it released its third-quarter 2017 earnings in mid-November of 2017, but it has never closed as high as it did this week. This is a great sign for this stock, as it has been consolidating below resistance at $59 for the past week or so and is now breaking higher. We expect AMAT to retest its November high of $60.89 during the next week as it moves on to even higher highs.

Credit Suisse recently reiterated its “Outperform” rating on AMAT and bumped up its 12-month target for the stock from $74 to $75. While we aren’t looking for the stock to make that large of a move while we’re holding our bullish calls, we do anticipate the stock climbing up to our strike price of $62.50 in the short term.

‘Buy to open’ the AMAT April 62.50 Call (AMAT180420C00062500) for a maximum price of $1.90.

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